Can Buildingstars unilaterally reduce the scope of any covenant in Sections IX and X of the Buildingstars agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
BUILDINGSTARS intends to restrict the activities of the FRANCHISEE under Sections IX and X of this Agreement only to the extent necessary for the protection of BUILDINGSTARS' legitimate business interests.
For the sake of clarity, nothing herein is to restrict FRANCHISEE from providing janitorial/cleaning services to any entity or person that is not a Customer; provided however, that the foregoing shall not alter FRANCHISEE's obligations, including but not limited to Section IX above, under this Agreement.
The foregoing covenants shall be construed as severable and independent and shall be interpreted and applied consistent with the requirements of reasonableness and equity. In the event a court of competent jurisdiction shall determine the business, time, or geographic limitations contained in this Agreement are illegal, invalid or unenforceable, then, the court so holding shall reduce the limitation necessary to render such restriction enforceable by such court. BUILDINGSTARS shall have the right to reduce the scope of any covenant contained in Sections IX and X, without FRANCHISEE'S consent, effective immediately upon receipt by FRANCHISEE of written notice thereof; and FRANCHISEE shall comply with any covenant as so modified. In addition to any other remedies available at law or equity, BUILDINGSTARS shall have the right to injunctive relief for a violation or threatened violation of the foregoing. FRANCHISEE acknowledges that the restrictions imposed in this Section are reasonable and their enforcement will not cause an undue burden upon FRANCHISEE'S ability to earn a livelihood.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars has the right to unilaterally reduce the scope of any covenant contained in Sections IX and X of the franchise agreement without the franchisee's consent. This becomes effective immediately once the franchisee receives written notice. The franchisee must then comply with the covenant as modified.
This clause gives Buildingstars significant flexibility to adjust the restrictions placed on franchisees. These restrictions likely relate to non-compete and non-solicitation agreements, which are common in franchising to protect the brand's customer base and proprietary information. The FDD states that Buildingstars intends to restrict franchisee activities under Sections IX and X of the Agreement only to the extent necessary for the protection of Buildingstars' legitimate business interests.
While Buildingstars has the right to reduce the scope of these covenants, the document also states that the covenants should be interpreted and applied consistent with reasonableness and equity. If a court finds any limitations in the agreement to be illegal, invalid, or unenforceable, the court can reduce the limitation to make it enforceable. This suggests that while Buildingstars can modify the covenants, these modifications are still subject to legal standards of reasonableness.
For a prospective franchisee, this means that the non-compete and non-solicitation clauses in their agreement could change during the term of the franchise. While Buildingstars can make these changes without consent, a franchisee should pay attention to whether the changes are reasonable and equitable, and seek legal counsel if they believe the changes are unfair or unduly burdensome. The franchisee should also be aware of their obligations under the modified covenant and ensure they comply to avoid potential legal issues or termination of the agreement.